Source: Anna Barclay / Getty
Donald Trump’s social media platform Truth Social took a huge dive on the stock market as more details on its earnings were revealed.
On Monday (April 1), investors got their first look at the financial data of the parent company behind Truth Social, the social media platform of former President Donald Trump. And what they saw led to the values of shares in the company plummeting sharply, leading to a billion dollars shaved off of the value of Trump’s personal stake in the Trump Media and Technology Group.
According to reports, the regulatory finding released by the company to go public on the NASDAQ stock market led to Trump Media stock sinking 25% in value to $46 a share as opposed to $79 a share the week before. The data also revealed that the company made $4.1 million last year in revenue, closing out with a fourth quarter earning of $750,000 but a net loss of $58 million overall. As for Trump’s stake in the company, which is estimated to be 78.5 million shares or 57% of all shares, the value of those shares dropped to $3.64 billion on Tuesday (April 2), from $6.25 billion previously. Trump Media went public after a reverse merger with Digital World Acquisition Corp.
A further report from Forbes states that Truth Social is being viewed as a “meme stock” similar to the rise seen with AMC and GameStop stock in 2021, which surged thanks to the rush of consumers buying up the stock when it was so low. Trump supporters swooped in to buy shares as Truth Social went public, but it couldn’t prevent the value drop. “Trump Media’s 1,470 price-to-sales ratio, which compares a company’s total valuation to its last 12-month sales, is exponentially higher than social media peers Reddit and Snap’s respective 9 and 4 price-to-sales ratios,” the publication wrote.
The news comes as Trump managed to successfully post a $175 million bond late Monday evening in his appeal of a massive civil fraud judgment against him in New York to prevent the seizure of his assets. The bond, lowered from $464 million after Trump’s attorneys stated that bond companies refused to back him for the amount, was secured through the Knight Specialty Insurance Company, a company owned by the Hankey Group, whose owner is an avowed Trump supporter. As for Trump’s potential to sell his shares in Truth Social, he is barred from doing so for six months.
